If you run a construction business — whether it’s just you, you and your spouse, or a small team, there’s still time in 2025 to turn your health coverage into a 𝗹𝗲𝗴𝗶𝘁 𝘁𝗮𝘅-𝘀𝗮𝘃𝗶𝗻𝗴 𝘁𝗼𝗼𝗹.

Here’s how smart contractors are using medical plans to save thousands in taxes before year-end 👇
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🔹 𝟭. 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟭𝟬𝟱 𝗛𝗥𝗔 (𝗛𝗲𝗮𝗹𝘁𝗵 𝗥𝗲𝗶𝗺𝗯𝘂𝗿𝘀𝗲𝗺𝗲𝗻𝘁 𝗔𝗿𝗿𝗮𝗻𝗴𝗲𝗺𝗲𝗻𝘁)

If you’re a 𝘀𝗼𝗹𝗼 𝗼𝗽𝗲𝗿𝗮𝘁𝗼𝗿 or your 𝘀𝗽𝗼𝘂𝘀𝗲 𝘄𝗼𝗿𝗸𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀, you can set up a 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟭𝟬𝟱 𝗛𝗥𝗔.

It lets your business reimburse your family’s medical expenses, everything from premiums to prescriptions, 𝟭𝟬𝟬% 𝘁𝗮𝘅-𝗳𝗿𝗲𝗲 to you and 𝗳𝘂𝗹𝗹𝘆 𝗱𝗲𝗱𝘂𝗰𝘁𝗶𝗯𝗹𝗲 to the business.

👉 Just make sure the reimbursements happen 𝗯𝗲𝗳𝗼𝗿𝗲 𝗗𝗲𝗰𝗲𝗺𝗯𝗲𝗿 𝟯𝟭 to count for 2025.
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🔹 𝟮. 𝗤𝗦𝗘𝗛𝗥𝗔 (𝗤𝘂𝗮𝗹𝗶𝗳𝗶𝗲𝗱 𝗦𝗺𝗮𝗹𝗹 𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗿 𝗛𝗥𝗔)

If you’ve got a small crew (under 50 employees) and want to help with health costs without setting up a group plan, the 𝗤𝗦𝗘𝗛𝗥𝗔 is a great fit.
For 2025, you can reimburse up to:

• $𝟲,𝟯𝟱𝟬 for self-only coverage
• $𝟭𝟮,𝟴𝟬𝟬 for family coverage

Your business gets a deduction, and your employees 𝗱𝗼𝗻’𝘁 𝗽𝗮𝘆 𝗶𝗻𝗰𝗼𝗺𝗲 𝗼𝗿 𝗽𝗮𝘆𝗿𝗼𝗹𝗹 𝘁𝗮𝘅𝗲𝘀 on the benefit.

(Just be sure to send the written notice to employees, even if you’re late, the penalty’s only $50 per head.)
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🔹 𝟯. 𝗜𝗖𝗛𝗥𝗔 (𝗜𝗻𝗱𝗶𝘃𝗶𝗱𝘂𝗮𝗹 𝗖𝗼𝘃𝗲𝗿𝗮𝗴𝗲 𝗛𝗥𝗔)

A newer option that’s becoming popular: the 𝗜𝗖𝗛𝗥𝗔.

It works for 𝗮𝗻𝘆 𝘀𝗶𝘇𝗲 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀, and lets you reimburse employees for 𝘁𝗵𝗲𝗶𝗿 𝗼𝘄𝗻 𝗶𝗻𝗱𝗶𝘃𝗶𝗱𝘂𝗮𝗹 𝗵𝗲𝗮𝗹𝘁𝗵 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 instead of running a group plan.

It’s flexible and can save a ton on administration costs compared to traditional group health insurance.
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🔹 𝟰. 𝗦 𝗖𝗼𝗿𝗽 𝗢𝘄𝗻𝗲𝗿𝘀 — 𝗗𝗼𝗻’𝘁 𝗠𝗶𝘀𝘀 𝗧𝗵𝗶𝘀

If you’re paying for health insurance personally but operating as an 𝗦 𝗰𝗼𝗿𝗽, don’t forget these two steps before December 31:

1. Have your 𝗦 𝗰𝗼𝗿𝗽 𝗽𝗮𝘆 𝗼𝗿 𝗿𝗲𝗶𝗺𝗯𝘂𝗿𝘀𝗲 the premiums, and
2. Make sure the cost is 𝗿𝗲𝗽𝗼𝗿𝘁𝗲𝗱 𝗼𝗻 𝘆𝗼𝘂𝗿 𝗪-𝟮.

That allows you to claim the 𝗮𝗯𝗼𝘃𝗲-𝘁𝗵𝗲-𝗹𝗶𝗻𝗲 𝗱𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻 on your 1040, skipping the 7.5% AGI limit on itemized deductions.
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🔹 𝟱. 𝗦𝗺𝗮𝗹𝗹 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗛𝗲𝗮𝗹𝘁𝗵 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗧𝗮𝘅 𝗖𝗿𝗲𝗱𝗶𝘁

If you offer group health insurance to your team, you may qualify for the 𝟱𝟬% 𝘀𝗺𝗮𝗹𝗹 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗵𝗲𝗮𝗹𝘁𝗵 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝘁𝗮𝘅 𝗰𝗿𝗲𝗱𝗶𝘁, good for 2025 and 2026.

To qualify:

• Cover at least 𝟱𝟬% 𝗼𝗳 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲-𝗼𝗻𝗹𝘆 𝗽𝗿𝗲𝗺𝗶𝘂𝗺𝘀, and
• Have fewer than 𝟮𝟱 𝗳𝘂𝗹𝗹-𝘁𝗶𝗺𝗲 𝗲𝗾𝘂𝗶𝘃𝗮𝗹𝗲𝗻𝘁 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲𝘀 with average wages under $𝟮𝟱𝗞.

That’s real money — and worth looking at if you’ve been on the fence about offering coverage.

Disclaimer: This content is provided for educational purposes only and is not legal, tax, accounting, or financial advice. Every situation is unique, so consult your own attorney, CPA, or financial advisor before making decisions based on this information.